There have been stories of healthcare providers across the United States facing shortages of everything from ventilators to respiratory masks to tests for the COVID-19 virus.
Under the Defense Production Act, the U.S. Department of Defense could go to a medical device manufacturer and, for example, place a large order for ventilators. The law requires the manufacturer to treat the order as a top priority, fulfilling it before any commercial orders previously received, as explained on Vox.
“It can do a lot of good things if we need it,” Trump said today.
— The White House (@WhiteHouse) March 18, 2020
Kevin Thornal, division president of diagnostic solutions at Hologic (NSDQ:HOLX), told MassDevice that the call to action falls in line with the priorities of most people in medtech who “want to do more than just make widgets and sell widgets.” Medtech professionals get into this industry to “give back to humanity and ensure that we can create devices and diagnostic tests.”
Asked about the possibility of invoking the DPA, Thornal says Hologic scientists and employees would say, “This is why we were put on this earth to respond to a health crisis like this one. I would expect my colleagues at other medtech companies would have the same feeling that our employee base feels right now — extreme pride. They’re just so excited they’re able to do something for the good of humanity across the globe.”
What’s unclear is how invoking the Defense Production Act will increase the production of much-needed ventilators and respirators. Medical device companies already are pouring every resource into production, with companies like 3M expanding production at plants making masks and other vital supplies.
Medical device leaders say the biggest hurdle remains the supply chain – ensuring the companies have the supplies necessary to manufacture these complicated pieces of equipment. If invoking the DPA can clear those hurdles to increased production, medtech leaders are open to the idea.
Brian Johnson, president of the Massachusetts Medical Device Industry Council (MassMEDIC), said he will wait to hear more while continuing to focus his group’s energy on understanding what the local industry’s needs will be. In particular, he’s working to ensure Bay State medtech workers can stay on the job if a “shelter in place” order is given. “We’re working across all levels of industry within the state to see what our needs are,” Johnson said.
The group also is collaborating with biotechnology and hospital groups to ensure better communication and to identify critical supplies to treat patients in one of the country’s COVID-19 hotspots. This is part of a broader effort to ensure cooperation and coordination.
“We need to make sure anything we can do to combat this virus is used,” Johnson said. “Any tool in the toolbox. Any bullet in the gun. Any bit of brainpower. Any shared effort is welcome, and we need it.”
But the particulars of the DPA remain the be seen. The powers haven’t been deployed in decades and even then, the conditions were very different. This makes it difficult to anticipate how the federal government will direct the medtech industry.
“The devil will be in the details,” Johnson said. “We would want to see how they plan to roll it out. Medtech companies already are doing everything they can to respond to the crisis. It’s not a matter of will, desire or ability. It’s a matter of a global pandemic hitting the healthcare supply chain at once.”
Hogan Lovells law partner Joy Sturm, who is in the government contracts practice and focuses on the life sciences sector, told MassDevice the broad nature of the statute has many implications. For one, the government’s authority could not only affect companies with current government contracts, but those without who are called into action to manufacture goods under the DPA.
Sturm believes that a secondary effect of the increased manufacturing could be the building of the U.S. industrial infrastructure, which the current administration has signaled intent toward. However, with the fluid situation of the coronavirus, achieving that outcome may be more of a waiting game.
“Any action to try to divert manufacturing to the U.S. is not going to happen overnight,” Sturm said. “Reliance on the existing supply chain is a fact of life and will be for quite some time, regardless of whatever steps the administration takes.”
Medtech and technology regulatory attorney Mike Heyl, also a Hogan Lovells partner, said the current supply chain is potentially a major concern as the pandemic persists. When facilities closed in China in the earlier stages of the coronavirus outbreak, the supply chain experienced a disruption that could resume if manufacturers close facilities in the U.S., according to Heyl.
Also, sophisticated products like ventilators and their components may be challenging for manufacturers to produce if that supply chain is broken. Even products unrelated to the DPA that aren’t specific to the coronavirus situation could be affected, leaving plenty unsure of what’s coming next as the situation continues to unfold.
“There have been concerns raised that are specific for certain targeted products,” Heyl said. “The concern is that maybe a critical part or component won’t be available for delivery or production because of a shutdown.”
DeviceTalks editorial director Tom Salemi and MassDevice editorial assistant Sean Whooley contributed to this report.